And for obvious reasons.
The language in the report from the Presidential Advisory Panel on Land Reform and Agriculture is very emotive.
“In recognition of the magnitude of the responsibility placed on our shoulders, it was incumbent on each member of the panel to always be mindful of and hear the cries of the majority of our ancestors, who were dispossessed of the land of their birth through bloodshed and untold pain, but also to be mindful of the hopes and dreams of our future generations for a just, prosperous, stable and egalitarian country.”
That people and companies in the financial services sector are wary of being misinterpreted is entirely understandable.
Commenting with little information about what lies ahead is risky – doubly so when the issue falls so clearly along race lines.
But it does make life more difficult when it comes to trying to report on developments and potentially offer any insights to help advisers and wealth managers navigate the turmoil.
Emotions and finance are not a great combination.
Lay of the land
The redistribution of land has been a key pledge of the ruling African National Congress (ANC) since it rose to power in 1994.
It’s impossible to ignore that 72% of farming and agricultural land across the country is held by white people, who account for 9% of the population.
This equates to 22% of all land in South Africa, according to a 2017 state land audit.
In contrast; Africans own just 1% of all land in the country; which also puts them behind their coloured (14%) and Indian (2%) countrymen.
So, with newspaper headlines shouting about a ‘land grab’, talk of expropriation without compensation has naturally made people nervous.
Part of the mandate given to the presidential advisory panel was to consider such a move.
In its report, made public in late July 2019, the panel, “offered a proposal for a constitutional amendment that clarifies that [expropriation without compensation] may be necessary in limited circumstances, but certainly in order to elevate the objectives of land reform”.
It provided potential wording for the relevant section, but it did not give any indication of what the “limited circumstances” could be.
The main opposition party issued a statement on 31 July strongly rejecting the proposed changes to the constitution, arguing that it already permits reclaiming land without compensation.
MP Glynnis Breytenbach wrote: “The Democratic Alliance unequivocally supports land reform (which could conceivably be without compensation in very specific circumstances).
“[But it] unequivocally opposes an amendment to the constitution to allow for indiscriminate expropriation without compensation.”
She added that the DA “believes that a push to amend the constitution for this purpose is a move that will condemn our economy to inevitable collapse”.
Keep calm and carry on
That politicians are arguing about detail is to be expected.
But away from the machinations of government, people are being left to fill in the gaps.
According to a source, who wished to remain anonymous, the situation has been “blown out of proportion”.
“What the government is trying to achieve is positive for the country but the ambiguity and slowness to define the process has caused panic.”
The risk, however, is that people may be making financial decisions based on incomplete facts and nightmare scenarios.
Getting down to brass tacks
Removing emotion from the situation is a big ask, with one side feeling attacked and the other believing that it is on the cusp of achieving a long-held dream.
But, in absolute terms, few people will likely be hit by land expropriation. Even fewer without any form of compensation.
And, unfortunately, there is opportunity in upheaval.
“A lot of South African assets and businesses are looking incredibly attractive and trading at almost all-time-low valuations,” the source added.
Looking beyond the immediate turmoil, the long-term ramifications could be a worsening of South Africa’s brain drain and see even more wealth depart its shores.
In the short-term, however, it is sensible to continue carrying out periodic reviews of any financial plans and adjust accordingly.
But keeping emotions out of the process may be even more important now than it was before.